Nicola Villa, IBM Europe's leader of IoT started his IoT Solutions World Congress (IoTSWC) keynote, titled “The Business of Things,” by pointing out the dramatic changes in the digital world. These shifts are changing the view of IoT and creating new business models, offering business opportunities, and transforming industries.

IBM booth at IoTSWC (Photo courtesy: Pablo Valerio)

There are two major trends changing the industry, Villa said. First, “the world is being rewritten in code,” driven by the speed and connectivity of the new networks, the deployment of sensors, and the proliferation of mobile devices. Second, IoT “is no longer just a technology conversation, it has become a boardroom discussion.”

Villa continued, there are three revolutions happening as we speak:

Broadband is giving cities the connectivity they need to digitize all their services.

Sensors are being embedded in everything, collecting massive amounts of data.

The analytics revolution, when data holders can dig out many more useful information and create new uses of data.

Those changes create new opportunities for the industry, as the IoT focused on manufacturing and monitoring –the typical M2M– shifts into “monetizing and creating new business opportunities from all the data being collected,” he said.

While IT companies for decades have been shifting their business model from manufacturing to services, and IBM is a good example, now other industries are joining the trend creating new business units to leverage the data they possess.

Villa used the example of Kone, an Finnish manufacturer of escalators and elevators, who, during the past 12 months, has been piloting a new business unit with IBM, “moving from an assets company to a company dedicated to people’s flow,” he said.

Using their expertise, data collection, and the power of Watson, Villa said, Kone is now offering their services to a wide selection of businesses, analyzing how people move in different areas, such as malls, airports, shared offices, etc.

“[It] has moved into an entire new market,” Villa said, “and Kone is having those conversations at boardroom level.”

To be able to service the IoT industry with those analytic capabilities, last year IBM opened its Watson IoT Global Headquarters in Munich. The company has committed a $3 billion investment in these technologies.

I had the opportunity to chat with Villa after his talk. He told me that analytics and AI are driving the industrial IoT for IBM, and Europe is the “cradle of innovation for IoT, many of the technologies and innovations on the [IoT] industry are coming from the perspective of Europe”, and IBM “wants to create an open innovation environment, a complete new ecosystem [based on] creating new solutions targeting the new industrial revolutions” such as Industrie 4.0, the German initiative.

I asked Nicola Villa: What is the biggest challenge IBM has in the IoT market today, and how affects its strategy in Europe? He said:

Having worked a lot in China in my career, one of the things I have learned there is that the Chinese word 'Challenge' also means 'Opportunity.' And this is the spirit we have in Europe, within and outside IBM. The opportunity for us collectively is to keep driving a profound shift in the way technology is being used – and provide an impact at industry and government level – when talking about IoT. It is about IBM partnering with our clients to build an open ecosystem that turns technology into business outcomes, through innovation. As no organization alone can unleash the true value of IoT, it is only through openness – of the platform, of the ecosystem – that we can help our clients accelerate their road to digitization and achieve the related benefits. IBM is ready to take a leadership role, though the Munich global Watson IoT center, and become a catalyzer of open innovation for the Internet of Things.

Where do you see the biggest challenges in the IoT market? Let us know in the comments section below.